In the months running up to last week’s announcement that Jerker Johansson, the chief executive and chairman of UBS’ investment banking division, was to leave the Swiss bank, speculation had already begun in London and Zurich about his likely successor.

Dual appointment: Kengeter

As it turned out, UBS chief executive Oswald Grübel decided that a single person would not be up to the task of turning round the business, and promoted co-head of investment banking Alex Wilmot-Sitwell and global head of fixed income, currencies and commodities Carsten Kengeter, as joint chiefs of the division.

For many inside UBS, which declined to comment for this article, Johansson had been a marked man ever since the investment bank’s Sfr7.5bn (€5bn) fourth-quarter loss, which pushed the bank to a Sfr20bn full-year loss – a record for a Swiss company. The appointment in late February of former Credit Suisse chief executive Grübel to replace Marcel Rohner put a further question mark over Johansson’s future.

The idea behind last week’s dual appointment comes straight out of a long-held belief in investment banking: that in what is often a mercurial business the weaknesses of one candidate in a particular area can be complemented by strengths in another. Indeed, the promotions of Kengeter and Wilmot-Sitwell were described by one senior London-based colleague as a “no-brainer”. He said: “Alex is very good with clients and is not someone who will be overwhelmed by a challenge, while Carsten has the markets experience and is perfect to sort out the fixed-income side of things.”

However, as in other cases where joint heads have been appointed, Wilmot-Sitwell and Kengeter look to some like an odd pairing. Wilmot-Sitwell has had a 13-year career at UBS and its predecessor Warburg Dillon Read, while Kengeter has been at the bank for less than six months, having joined in December from Goldman Sachs for a reputed three-year guaranteed income of $8m-$10m. A spokesman for UBS declined to comment.

The challenges facing the two men are daunting, as they attempt to hold together a division that has endured thousands of job cuts, zero bonuses and plummeting morale. Compensation will be one of the most pressing issues facing them as they take control. UBS is understood to have raised basic salaries for some managing directors in its investment bank to as much as £300,000 as part of an attempt to hold on to staff who were upset by the bank’s decision to pay no bonuses to senior staff.

Attempting to put in place a new incentive structure for the investment bank will not be simple, with the Swiss Government as a major shareholder. Political pressure was largely behind UBS’ decision to cut its bonus pool by 80% and pay no cash bonuses to staff in the investment bank. With many staff accepting job offers from rivals, including last week’s hire of top London-based banker Jim Renwick by Barclays Capital, Kengeter and Wilmot-Sitwell will need to reach a compromise quickly.

One managing director said: “They need to find a way to incentivize people for the long term. Pay last year was very stingy and people need guidance on what they can expect in future as morale is at rock bottom at the moment.”

In October, Johansson had announced a “repositioning” of the investment bank following a lengthy review of the division’s strategy, which focused on restructuring the fixed-income, currencies and commodities business around the flow businesses. How far Kengeter and Wilmot-Sitwell will use the Johansson strategy is unclear, and both declined to comment for this article.

Announcing their promotions, Grübel sought to draw a line under speculation that the investment bank might be sold. He said it was “indispensable to our global firm and to our integrated business model”.

UBS will today announce its results for the first quarter, the first since Grübel took charge. Last month Credit Suisse reported a strong set of results, helping propel the bank’s market capitalization above that of UBS for the first time in more than a decade.

Internally it is clear to UBS bankers that the investment bank will continue to be run on a tight leash, and one said there was little risk appetite within the firm. Grübel last week said that continuing to cut the bank’s legacy risk positions was a priority, but the main task for Kengeter and Wilmot-Sitwell will be ensuring he can deliver his pledge to return the firm to profitability this year.

One UBS banker said: “This is a big step in the right direction. The investment bank is in a lot of trouble and Jerker had achieved about all he could.”

• But are two heads always better than one?

John Thain and John Thornton, co-chief executives, Goldman Sachs in Europe; President and co-chief operating officers, Goldman Sachs

The serial double act of John Thain and John Thornton are flipsides of the same coin. Thain is a dry and managerial technocrat with a degree from Massachusetts Institute of Technology, who was dubbed “root canal man” at Goldman Sachs because he “drilled into your soul”. Thornton, on the other hand, is a preppy and boyish law graduate from Oxford who was seen as one of the most talented client bankers of his generation. They ran Goldman Sachs in Europe during its aggressive expansion between 1995 and 1997, and were co-number twos to Henry Paulson for five years after Goldman Sachs went public in 1999. Perhaps realising they would never replace Paulson, Thornton left in 2003 to work at Tsinghua University in China and Thain left in 2004 to successfully run the New York Stock Exchange and, less successfully, Merrill Lynch.

Another pairing which some claimed was a marriage made in hell. Mack, a Morgan Stanley legend, had fallen out with chief executive Philip Purcell (he wasn’t alone in that regard) and quit to join Credit Suisse First Boston in 2001. His swingeing cost cutting impressed enough people for him to be appointed co-chief executive of the group, alongside Euromarkets veteran Grübel, the following year. The two appeared to get on well in public, but reports of clashes over strategic direction between the two emerged, and it was not a surprise when Mack quit 18 months later, leaving Grübel in charge. Mack returned to Morgan Stanley: Grübel has since left Credit Suisse and now runs rival UBS.

HSBC raised eyebrows in the industry in 2003 when it hired Studzinski, the former deputy chairman of Morgan Stanley International, with a remit to build its advisory business. The bank hired dozens of bankers and its costs rose accordingly, but it did not make progress in the areas in which it had intended, and the art-loving Studzinski departed for Blackstone three years ago this month, leaving Gulliver in sole charge of the investment bank.

An exception that proves the rule: the five years and counting reign of Black and Winters at JP Morgan has proved to be one of the more successful partnerships in the investment banking industry
Winters is arguably the more important of the two, and is regarded as part the team that along with chief executive Jamie Dimon, helped the bank avoid the excesses that destroyed or diminished many of their rivals.

While Deutsche Bank over the past decade has become virtually synonymous with its chief executive Josef Ackermann, not far below, Cohrs, and to a larger extent Jain, have become known as the power behind the throne. Losses in the global markets business overseen by Jain have led to a shift in the balance of power. Jain has seen his star fall while Cohrs has been lauded for his efforts in reducing the bank’s exposure to leveraged loans. However, any ambitions they may have had for the top spot have been thwarted, at least temporarily, since Ackermann extended his contract until 2012.